Travel PR experts, many who have clients impacted by the collapse, believe the Government and Civil Aviation Authority (CAA) are handling the crisis well, but have criticised some travel operators for sharply increasing flight and holiday fares after the world’s oldest travel company, Thomas Cook, ceased trading early on Monday morning.
Thomas Cook’s collapse has been blamed on a failure to modernise how the business operates in the digital age. The group has racked up insurmountable debts over a number of years, with estimates that the profit from three million of the 11 million holidays it books each year services interest payments.
In recent months, the company failed to find a suitor to take it over and the Government decided not to bail out a business whose collapse appeared inevitable, despite the huge public cost of repatriation.
"Thomas Cook has been in communications agony for several years," explained Paul Charles, founder and CEO of The PC Agency. "Its strategic approach has failed to keep up with new booking channels and successive CEOs have been unable to change the business model."
The collapse left more than 150,000 holidaymakers stranded, while one million forward bookings of holidays, weddings, honeymoons and travel deals will need refunding and re-organising.
The voluntary liquidation has placed 9,000 UK jobs under threat, with all of its 50-strong marcomms team made redundant. Its group comms director is PRWeek Power Book regular Alice Macandrew, while David Child was recently promoted to Thomas Cook Hotels and Resorts head of marcomms.
In recent times, the company has been working with one retained agency, Eterna Partners, since December 2018, while Tin Man has worked on some projects.
"Although we remain on hand to support the communications team who are now working with the administrators on the repatriation, it’s inevitable that we will step back in the coming days," Eterna Partners co-founder Nigel Fairbrass told PRWeek.
More than 150,000 holidaymakers need to be returned to the UK after the collapse of Thomas Cook
Thomas Cook’s collapse has triggered the UK’s largest ever peacetime repatriation – Operation Matterhorn – which is being led by the Government and CAA.
"While the travel industry is reeling from the collapse of 178-year-old Thomas Cook, the Civil Aviation Authority’s impressive repatriation plan has kicked in without a hitch," travel PR expert and Rooster MD James Brooke observed. "And the media, despite the usual sensationalist stories, is coming into its own communicating the facts and helping to reassure the travelling public."
The corporate failure has coincided with a spike in demand for holiday and flight re-bookings, catching out the dynamic pricing systems of some travel operators.
Trying to rescue my parents two week holiday and @TUIUK keeps crashing and the price has gone up £450 per person in less than an hour. I understand that demand dictates price but surely this is capitalising on already miserable people #thomascookairlines #thomascook pic.twitter.com/WIidA60zJO— Steve Strickland (@S_Strickland) September 23, 2019
Brooke said this is causing comms challenge for major operators in the travel industry.
"What’s concerning is that ‘supply and demand’ is being publicly cited as a reasonable justification for the price increases," he says. "While the industry is coming together as a family to support Thomas Cook’s employees and those holidaymakers affected, opportunistic pricing is only going to further damage the reputation of an increasingly fragile industry."
Several companies that have taken flak for sharp price hikes include Ryanair, easyJet, Jet2 and Virgin Holidays.
Absolutely disgusting from @jet2tweets @Jet2Holiday within the space of an HOUR they’ve doubled the price of flights following the news of #ThomasCook collapsing. Yet another Typical greedy airline. #jet2 pic.twitter.com/3xDTlq60mn— Olivia Howat (@olivia_howat) September 23, 2019
Thank you @easyJet and @TUIUK for pushing your prices up to capitalise on the collapse of @ThomasCookUK easy Jet hiked them by £500 at 10pm last night and then a further £1,000 by this morning. And Tui hiked them this morning by £500.— Loving 40rty_EastSurrey (@Loving40rty_ES) September 23, 2019
PHA’s head of strategic communications Neil McLeod tells PRWeek that cashing in on a crisis is "never a good look".
"Even if it is put down to market forces driving up prices, the view of the public is that it is cold-blooded opportunism," McLeod said. "They expect travel firms to act like businesses, but not to use the Thomas Cook situation as a passport to make more money from the panic and misery of people who face missing out on holidays they have worked hard for."
"It would be foolish for any travel company adding noughts to its prices to think they will win long-term custom from a quick kill."
Learning from Monarch
One body that has received positive praise for its handling of the crisis is the Civil Aviation Authority, which has previous experience handling the collapse of Monarch Airlines in 2017, which left 100,000 holidaymakers stranded.
"Preparation, speed and keeping people informed is of the essence when responding to a crisis," explains Debbie Flynn, managing partner of The Brighter Group.
The CAA is well-prepared for such situations, they have quickly implemented a repatriation programme and have provided an excellent resource for consumers, the trade and media through their www.thomascook.caa.co.uk micro-site."
This quick response provides affected customers with "confidence and reassurance at a very distressing time".
The Brighter Group has a number of clients affected by the crisis, including tourism boards, hotels and tour companies. Thomas Cook’s vast network of hotels, tour operating brands and several hundred high-street travel agents reached hundreds of destinations and its airline flew to more than 70 cities across Europe, the Americas, Asia and across the world.
The agency began developing contingency plans as Thomas Cook’s financial predicament began to unravel last week, which included setting up an internal taskforce to consider the various implications and how best to support clients, developing a communications plan, drafting potential statements and having a team on-call over the weekend to monitor the situation.
Flynn told PRWeek this early planning allowed the agency to proactively to secure several media interviews for some clients to provide commentary in the event of a collapse, as well as ensure that client customers were well informed.
Lotus, another travel comms specialist, also reports an industry-wide comms operation that is well orchestrated.
"On Monday, communications teams from companies who partnered with Cooks were on overdrive to provide their customers with reassurance that either their holidays would go ahead as planned or to explain the complicated protection schemes," senior account director Frances Tuke said.
"Competitor travel agents were quick to provide support to their jobless peers and reached out in the trade press to offer Thomas Cook employees new job opportunities."
Winners and losers
Small island destinations, such as Mallorca, are predicted to be most impacted by Thomas Cook's collapse.
Although the UK Government has received some flak for choosing not to bail out Thomas Cook, experts agree that from a communications perspective, it has handled the situation well.
"They signalled early on that there was unlikely to be a bailout of Thomas Cook and that managed expectations early on," The PC Agency’s Charles said.
Tuke adds: "The government was also quick to address the job losses of 9,000 UK-based Thomas Cook staff (and voters), by announcing a cross-government taskforce to support Thomas Cook employees and local stakeholders."
The collapse of Thomas Cook is likely to have a ripple effect across the travel and tourism industry for many months and Charles believes it could also influence consumer behaviour.
"The package holiday as we know it has changed considerably – consumers have grown up thinking it was always safe to book through a tour operator. The Thomas Cook collapse will lead holidaymakers to question booking this way and may drive future sales to larger airlines such as BA, Virgin and easyJet, as well as OTAs such as Hotels.com.
"They will be the winners this week in this sorry tale and the market share for direct bookings will rise sharply."
He believes the losers will be smaller European island destinations that relied upon Thomas Cook for business.
"They will suffer this Autumn and will need to be clever in promoting themselves for 2020, in order to find the holidaymakers they will lose," he says.
Tuke adds that smaller operators that were heavily dependent on Thomas Cook will need to fight hard for their own survival.